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Dear Steve,
We are planning a move from Phoenix to South Florida. With the market like it is, we are not confident about selling
our house for a reasonable amount. A real estate appraiser told me about a service that allows you to trade your house
to someone with a similar-priced home anywhere in the country. How does this work?
-- T. S.
Dear T. S.,
House swapping is indeed a viable option in this market. In fact, for a pair of frustrated home sellers, it can solve two
problems at once: the sale and the replacement purchase. Swapping is nothing new. But until the current real estate bust,
most "swaps" were just mutual lease arrangements, where owners traded spaces for vacation purposes. Now they're playing
for keeps.
There are now several matchmaking
Web sites that facilitate permanent swaps. Among
them: OnlineHouseTrading.com,
DomuSwap,
Pad4Pad, Daytonahometrader,
TrySwappingIt
and
Goswap. Typically, these sites require a small
one-time fee. Once you register, you will receive
lists of potential matches in your desired geographic
area based on your property profile. Craigslist
community Web sites also have growing housing-swap
sections, where you'll need to do your own matching.
There's no law saying that homes have to be of similar price in these arrangements. Some parties will gladly
make up the difference between both homes' values if the deal is right. However, a home swap should always be treated like
any other real estate transaction.
Despite the distance involved, you will certainly want to get a first-hand tour of the property, no matter
how glorious the place looks in digital photos. You will still want to have appraisals and inspections done for the new
property. And both swappers will need to get new mortgages. (By the way, I would advise against getting involved in a swap
with sellers who owe more than their properties are worth.)
Increasingly, real estate agents
are steering their clients toward swapping as
a last resort. You may want to enlist a Realtor
or other knowledgeable professional on a fee basis
to assist you with the details and nuances. Another
big caveat: Realize that swappers tend to overprice
their homes for optimal trading leverage. Hence,
there will likely still be some negotiation after
two swappers are initially paired up.
There are some potential economies both swappers can enjoy. You could, and perhaps should, use the same title
companies to coordinate simultaneous closings. You may also get a substantial reduction in moving costs by each using the same
moving service, which won't be forced to return to the original destination with an empty trailer. This could be a big cost-saver
these days as fuel prices continue to spiral out of sight.
While you should be cautious in the swapping game, you should also try to keep an open mind if you can't find
what you consider the perfect match. Be ready to consider several options.
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